Four of the operators who attended the 18th annual National BHPH Conference hosted by the National Alliance of Buy-Here, Pay-Here Dealers last week offered glowing assessments of what they took away from the Wynn Resort & Casino in Las Vegas.
More than 70 speakers and panelists discussed important subjects collected under the theme of “Navigating the Road to BHPH Success.” Three days of material might seem overwhelming, but Owen Gorman of the Gene Gorman Automotive Group said he enjoyed it very much.
“The sessions were just long enough to be informative and not drawn out,” said Gorman, who operates dealerships in the Florida cities of Port Charlotte and Punta Gorda. “The session moderators are a must, and they did a good job.”
The educational sessions featured 14 different workshops covering:
—Current industry developments
—Accounting and tax updates
—Lowering reconditioning costs
—Add-on products that add value
—Maximizing tax refunds
—Using the web and social media to gain market share
—Payment devices
—Technology solutions for success
—Turning charge-offs into cash
—Capital
—Deal jacket reviews
—Inventory acquisition, disposition and financing.
All sessions were interactive, allowing attendees to ask questions and get answers on these important topics.
“The NABD gives me a front-row seat to all of our industry’s hot-button topics,” said David Bearly, who operates Dave’s Greenlight Auto Sales in Greenville, Ill.
“Now that I know what I don’t know, I can direct my efforts to help improve my customers’ experience while protecting my bottom line,” Bearly added.
Lloyd Robertson called this year’s NABD event a “win-win.” Robertson runs Lloyd’s Auto Sales in Hot Springs, Ark.
“Not only did I learn practices that will make me a better, more efficient operator, I will be much more profitable because I learned what not to do,” Robertson said.
Some of what Robertson and other attendees learned about what not to do likely stemmed from the presentation by Malini Mithal, a director at the Federal Trade Commission. Mithal discussed FTC’s jurisdiction and enforcement authority over the BHPH industry and her presentation included examples of current FTC initiatives involving deceptive practices, fair credit reporting and other violations including the furnisher rule, risk based pricing, privacy and data security and other violations.
Mithal also provided helpful guidance to a jam-packed audience on compliance reference materials.
“This session will help attendees avoid regulatory mistakes that can cost them millions,” said NABD president Ken Shilson. “We are deeply grateful to Milani and to the FTC for their candor and insights.”
Other general education sessions included a presentation by Cox Automotive leaders on “simplifying how vehicles are acquired and sold,” a benchmarks and trends update, and the Hall of Fame induction of Mark Sauder, former chief financial officer of DriveTime.
The program concluded with interactive sessions covering collections best practices, phone skills for success, succession planning and a discussion on how regulators are changing the BHPH business.
“Attendees who stayed to the end derived significant information and value from the Thursday morning sessions,” Shilson said.
John Linnehan Jr. and Tim Byrd of DealerRe conducted a motivational session on the final day that got the attendees in compliance spiritually.
“NABD is extremely grateful for their participation and contribution to the success of this event,” Shilson said.
The conference began with a first-timers reception that had more than 200 attendees.
Donnie Cochran wasn’t a first-time attendee; he has come to NABD’s national conference 11 times.
“Enjoy it every year,” said Cochran, who operates Bayou Auto Sales in New Iberia, La.
NABD sold out its exhibit hall as vendors and service providers enjoyed their time at the Wynn, as well.
“This was the best conference that I have attended in my 21 years in business,” Tax Refund Services and TaxMax founder Bill Neylan said.
“We had a record number of dealers come to our booth to learn about our products, and we even had proactive dealers sign up for our service right in our booth,” Neylan continued. “Dealers at the NABD Conference were dealers who were serious about their businesses and were ready to act on products that can better their dealerships. Congrats on such a great show, NABD!”
CAR Financial president Rick Potter offered this assessment for operators who did not make to Las Vegas this year.
“NABD promised it to be one of the greatest BHPH events in history, and it did not fail to meet this objective,” Potter said. “I witnessed standing-room-only crowds in some of the sessions due to the very robust attendance, and talked to a large number of new and prospective dealers during the vendor showcase periods.
“The seminars and speaker panels were fantastic, and focused on the most influential aspects of our industry today. If you did not attend this event this year, don’t make the same mistake in 2017,” Potter added.
For operators who couldn’t make the trip, conference presentations have been posted on the NABD website at www.bhphinfo.com and can be downloaded for free.
“2016 NABD was the single best presentation of events that I have experienced in my 10 years in this industry,” Cal Amp’s Bill Caan said. “Record attendance and a dynamic lineup of speakers and topics made for an outstanding three days.
“Ken and Ingram (Walters) continue to build on previous shows and their hard work has paid dividends. Future NABD events are a can’t-miss for industry participants and vendors,” Caan went on to say.
NABD announced that its next event will be a BHPH conference Nov. 1-3 at the Rosen Shingle Creek Resort in Orlando, Fla. “This facility is the nicest resort in Orlando and NABD offers discounted room rates with no resort fees while supplies last,” Shilson said.
More information about that conference is available on the NABD website or by calling its headquarters at (832) 767-4759.
“It’s always exciting to see a diverse group of dealers come together with a focus on improving their business and the industry as a whole. I’m already looking forward to the next NABD event,” NextGear Capital’s Lori Kahre said.
NABD also is considering offering BHPH Master Dealer Certification training. A brief survey is available on the NABD website and survey responses are requested.
Leading into the 18th annual National Conference for BHPH hosted by the National Alliance of Buy- Here, Pay-Here Dealers, we spoke with Ken Shilson, the president and founder of NABD, about a host of issues impacting operators.
BHPH Report asked Shilson about the diminishing market presence BHPH dealers possess nowadays, how moves made by investment leaders on Wall Street are impacting dealers on Main Street, as well as some tidbits that dealerships can leverage during the second half of the year.
How are BHPH operators surviving the storm from subprime finance companies that seems to have been going on for several years now?
Based on numbers that Experian has provided through December 2015, it appears that buy-here, pay-here has lost about 40 percent of its market share to subprime finance companies, credit unions and franchised dealers. That’s a pretty big slice out of the market, and therefore it has to result in some adjustments. One of the big adjustments is in order to survive today you have to have financial flexibility and capital availability. You have to get your financial house in order to be able to weather the Storm, so to speak, where all this competition is going on. If you to sell a car today to pay the bills tomorrow you’re in deep trouble because it’s going to take time for us to regain our market share. It’s not going to come back automatically.
You must have a compliance focus today. That’s because in the past the industry has not been scrutinized the way it is now. You cannot ignore that big brother is looking. You can’t ignore it. Whether you’re big or small, or in between, you better get your compliance management system in place.
You have to have consistent underwriting. Trying to match what Wall Street is doing, what franchised dealers are doing and what credit unions have done is not smart. What is smart is to keep a consistent underwriting approach and follow your business model. I have a saying: Never match underwriting with stupidity. If you try to do it, you’ll end up with disastrous results. You need to be consistent and disciplined in your underwriting.
You need to get efficient by embracing technology. With the loss in market share, you have to reduce your costs. You have to operate more efficiently in order to operate more profitably. In other words, you need to be able to do more with less. Th e good news is that once the industry rebounds you’ll make that much more money because you’ve already streamlined things to be more profitable.
No need for specific numbers, but what’s your assessment as to how many good operators have departed the business in the last couple of years? What void is it leaving?
I think that’s a great question and no one has asked me that question before. It’s a very valid question. My answer is none. No good operators have left the business because good operators understand that it’s a marathon, not a 100- yard dash. They’re prepared to stay the course. Operators. What we’ve lost is people who were over-leveraged, who didn’t discipline themselves properly, who tried to match underwriting with stupidity, who didn’t get compliant, who didn’t do any of the things that I just said.
They continue to fail. They will continue to fail as long as they don’t have a long-term plan. I know these guys. I know who the good operators are, not based on subjectivity but based on performance. They’re all still there.
Both Fitch Ratings and Moody’s have shared reports this year about the deterioration of subprime auto ABS. What’s your reaction to the concern shown by Wall Street?
I have been tracking this for two years now. I talk with Wall Street people who are both investors and securitizers. I have said for the last year, maybe the last 18 months, that there are some deep subprime securitizations that were poorly put together and poorly structured. To that end, they are starting to fail. What I mean by that is the securitizers who had no experience in the underwriting or collection of this kind of paper, those who did not structure deals where they matched the right vehicle with the right customer, are failing and will continue to fail. Not all securitizations are bad. Th ere are many that are performing well. Those people who structured them right and those people who did do the right matching process, that paper continues to perform. But I think in the months ahead more of these poorly structured ABS transactions are going to surface. Th is is going to create an enormous opportunity for the buy-here, pay-here industry to get the customers and those vehicles back from the defaults that come out of these poorly structured deep subprime deals.
At the federal level, how informed — or misinformed — are regulators and lawmakers when it comes to how BHPH dealerships operate? What can be done to improve the situation?
There are some regulators that I would consider to be fairly well informed and others who are not. I don’t think it’s fair to generalize one way or the other. What I would say is the key To this is a continuing communication, which needs to exist between the industry leaders and the regulators to try to help more of them to have a clearer understanding of the importance of subprime auto finance industry in America today. How important of a source of transportation it is? Now at the end of the day as the leaders step up to do that — and I want to applaud NIADA’s efforts through their leadership conferences that NABD totally supports — it’s not going to be what NIADA does or what NABD does, it’s what the individual operators do. We’re going to be judged by their actions. If the industry is waiting for us to make all of the problems go away, that’s not going to happen. They’ve got to take compliance seriously. They’ve got to operate properly within regulatory constraints to do the right things or suffer the consequences.
The NABD is approaching 20 years of hosting the National Conference. What’s your assessment of the journey not only for the organization but for the BHPH industry during that span?
We want to thank the tremendous support from the many operators in the industry and other, our sponsors, people who are involved in the industry who have embraced and supported us over that journey. To them I say this: Buy-here, pay-here is a vital source of transportation in America. Without the buy-here, pay-here industry, millions and millions of Americans would not have any transportation at all and would have difficulty working and living. Buy-here, pay-here is a critical component of the American transportation system. Our consumers are car dependent.
Now NABD has championed the cause for the self-financed, buy-here, pay-here operators throughout its entire existence. We believe that the industry continues to need that type of representation. At the end of the day, we believe that the education and the training that we’re providing and offering have never been more important in this journey. The journey is not over. The journey continues.
What pearls of knowledge and wisdom would you like to leave with BHPH operators going into the second half of 2016?
I urge operators to stay the course, to get their capital and financial flexibility in order to continue in the highly competitive environment of today. I urge them to reconnect with their customers, which will help them regain market share. I urge them to take compliance very seriously and to get a compliance management system in place.
I would also say to them if they are not willing to get the education and training necessary to help them do those things, they need to expect the worst results. We’re at a time where you have to have more skill and more knowledge to navigate the course successfully than ever before. That cannot be attained by doing the same old things every day and expecting a different result.
Ken Shilson and Dustin Kerr spent weeks going over performance data from buy-here, pay-here dealerships nationwide along with portfolios from their related finance companies. Now the industry experts have finalized the new Benchmarks and Trends Report that will be shared during next month’s National Conference for BHPH hosted by the National Alliance of Buy-Here, Pay-Here Dealers.
Shilson, NABD’s president and founder, highlighted the latest report contains numerous graphs and charts together with a summary analysis so operators can understand both market and performance changes during last year. The summary also includes a forward-looking forecast of what’s ahead in 2016.
This year, Shilson worked on the project with Kerr, the newest BHPH moderator at NCM Associates. Both experts will be on stage at the Wynn in Las Vegas for NABD’s event that runs from May 24 to May 26.
“This report is the most comprehensive look at the subprime auto finance market we have ever done,” Shilson said. “I thank NCM, SGC Certified Public Accountants, and Subprime Analytics who contributed financial and operating data for the development of the report.
This is the 18th consecutive year we have compiled and issued a report containing financial, operating, and loss metric information which can be used by operators, capital providers, investors and others to evaluate performance and, where applicable, to compare their own results,” he continued.
“We carefully scrutinized the policies and practices used to generate the data to assure that all the information is credible. Although different accounting and operating practices are used in the industry, this report considers and adjusts for the major differences,” Shilson went on to say.
Past benchmark reports can be downloaded free of charge from the Subprime Analytics website at www.subanalytics.com. The archive covers the past five years. The most recent report will be posted in May prior to the NABD National Conference for BHPH.
More information about the conference — including the agenda, registration and links to discounted accommodations — is available at www.bhphinfo.com or by calling NABD at (832) 767-4759.
Shilson reiterated that NABD is a special industry group organized for the betterment of the BHPH industry nationwide, and has more than 13,000 members. Membership is obtained by attending NABD training and conferences, and members pay no annual dues.
“Our services are designed to complement and work with other automotive industry groups on matters pertaining to this segment of the automotive finance industry,” Shilson said.
By the time this article is published, buy-here, pay-here dealers will be well into the 2016 tax refund season. The good news is that tax refund advances are back for the first time since 2012. The bad news is that refunds are tracking behind schedule through February, but are starting to “trickle through” as we head into March.
Will the 2016 tax refund season be a boom or a bust for your BHPH business? Many BHPH dealers forecast for as much as 40 percent of their annual sales to be generated during the tax refund season. The most successful BHPH dealers plan ahead for this time of year in several facets of their business.
Many will ramp up vehicle inventory levels in anticipation of increased sales numbers. Some will implement a tax refund program to process tax returns directly from their BHPH location. Others will change their advertising message to encourage customers to use their tax refund as a down payment on a newer vehicle. Still others will use a tax refund to help customer bring their delinquent loan payment to current status by applying a portion of the tax return to the delinquent account.
However, just adding a large numbers of new loans during the tax refund season does not translate to success in a BHPH operation. Collecting on those loans is where true success is measured, and that success may not be known for two or three years.
It’s the lure of a large down payment.
Most BHPH dealers will see a sharp increase in sales during the tax refund season. However, approving loans just to hit aggressive sales targets could actually backfire on a dealer in the BHPH business. Tax refund season means that customers will generally have larger down payments compared to other times of the year.
A recent survey of BHPH dealers showed that a large percentage of dealers would let a large down payment influence their loan approval decision. Some dealers feel that a large down payment gives the customer “skin in the game”, and as a result the customer is less likely to default on their loan. Other dealers believe there is no direct correlation between the amount of down payment and the likelihood the customer will default on their loan.
These dealers believe that the down payment and the customer’s ability to pay should be evaluated separately.
With those factors in mind, here are the seven key drivers to success during the tax refund season. The most successful BHPH dealers will tell you that one of the keys to success during the tax refund season is to maintain discipline in the underwriting and verification guidelines that you have established. In addition, the following key drivers to success also apply:
1. Don’t take shorts cuts to approving a loan application because of a large down payment.
2. Don’t skip steps in the underwriting process such as pulling a credit report, getting a loan application with three years prior history on residence and employment, and getting a minimum of five references with verified phone numbers.
3. Don’t put the customer in too much payment. A large down payment should be used to improve deal structure (lower the payment, shorten the term) but not to approve a loan.
4. Calculate a net pay to payment ratio before a loan decision is made to verify the customer can afford the payment. One of the most common mistakes BHPH dealers make is putting the customer in more payment that they can afford.
5. Don’t let installing a GPS or starter interrupt device influence your loan decision. A customer with a high net pay to payment ratio or poor job or residence stability will be a problem customer regardless of installing a GPS or SID device.
6. Insist on getting a co-buyer on the loan application with every opportunity. The co-buyer provides an additional layer of security to protect the loan payment from going into default.
7. Don’t be too quick to pull the trigger on repossessions. Most BHPH customers will struggle with their loan payment at some point during the term of their loan. They may need frequent payment arrangements to get their account back to current status. The most successful BHPH dealers will work with their customers, keeping them in the vehicle and making payments. For these dealers, repossessing a vehicle is the last option.
The tax refund season can provide a big boost to a BHPH dealers annual business results. However, big sales numbers during tax refund season can be deceiving. The key to success in BHPH financing is not just putting loans on the books, it’s collecting out those loans!
Mark Dubois is president of Dealer Performance and Consulting. He has more than 30 years of experience in the automotive business ranging from sales, dealership management, recruiting and training, e-business, marketing and BHPH management. His website can be found at www.dealerperformanceandconsulting.com, and he can be reached at (941) 729-2357 or dealerperformancellc@gmail.com.
The latest update from the Internal Revenue Service should calm concerns from buy-here, pay-here dealers looking for potential buyers to have income tax refund monies available for possible down payments or for current customers to get their contract out of the delinquency bin.
The IRS said late on Thursday that it resumed processing individual and business tax returns following a system problem.
The IRS emphasized that taxpayers do not need to take any additional steps or action due to the outage, including people who filed just before or during the outage. Throughout this period, officials indicated taxpayers were able to continue to send their tax returns to their e-file provider. These companies have already started sending these tax returns into the IRS.
The agency indicated it is continuing to examine the underlying cause of this week’s outage as well as monitoring any follow-up issues. Officials emphasized that it's important to note that at this time this situation appears to be a hardware failure.
“IRS teams worked throughout the night and around the clock on this system outage,” IRS commissioner John Koskinen said. “Our processing systems are back in business.
“Taxpayers should see little, if any, impact on their tax returns or refunds,” Koskinen continued. “We apologize for the inconvenience this caused, and we appreciate the support and patience from taxpayers as well as our partners in the tax community and state revenue departments.”
The agency added that it anticipates that nine out of 10 taxpayers will receive their refunds within 21 days after being accepted by the IRS.
If operators have been putting off their plans to participate in a BHPH Boot Camp hosted by the National Alliance of Buy-Here, Pay-Here Dealers, they might miss their opportunity completely.
In a message to BHPH Report, NABD indicated its upcoming Boot Camp will be the final one the organization conducts. Limited space for operators still is available for the event that begins on Saturday.
The NABD Boot Camp is a two-day training session where attendees get the chance to see a dealership that’s been in business for more than 20 years in action. NABD co-founder Ingram Walters literally opens the doors to his back-end office where underwriting is completed, his reconditioning center and site of his related finance company for his operation, iCars, which is located just east of Charlotte, N.C.
NABD co-founder and president Ken Shilson also delves into a host of topics important to the success of BHPH dealers, including the establishment and monitoring of an RFC, what static pool analysis can reveal about a portfolio as well as what capital providers might be available.
The boot camp also provides ample time to interact with fellow attendees as well as the chance to sit down and have some one-on-one conversations with both Shilson and Walters.
To get more information, watch the above video, visit www.bhphinfo.com or call (832) 767-4759.
Here’s some good news for buy-here, pay-here dealers going into Thanksgiving celebrations.
After four years on the shelf, the banking industry has revived the Tax Refund Advance for 2016. This development means that much needed funds are expected to be in the hands of consumers in mid-January. Many individuals can expect up to $750 in 24 hours or less.
Prior to 2012, customers became accustomed to 24 hour refund loans. The old RAL (Refund Anticipation Loan) was greatly frowned upon by the current administration in Washington. Consumer protection advocates argued that the fees were too high and the APR was unacceptable. The latest reincarnation has put all of these concerns to rest. This is a win-win for both the dealership and the customer.
Come January, many of the new Tax Refund Advance products that are being proposed will come with zero APR and zero application fees.
Recent history has brought about the new normal of a 5- to 21-day tax refund cycle. This will still exist in 2016. The difference that is generating additional excitement is the opportunity to obtain up to $750 within 24 hours, without a credit check.
The demand for the return of the Tax Refund Advance comes largely in response to the decline in traffic seen by the professional tax preparer. Self-preparation software such as TurboTax and TaxAct seized control of the market after the RAL disappeared.
Consumers seem to have become unconcerned with their own personal qualifications to file a tax return. The market is hoping to capitalize on the primary, pre-2012 draw to the local tax preparer: the enticement of fast money.
Banking institutions within the tax refund industry market have seen dramatic declines in revenues since 2012. Self-prepared tax returns bypass these companies, resulting in reduced customer counts. An old product in the form of a Tax Refund Advance is seen as the new hope to reverse these trends.
Such trends have been mirrored at car dealerships who have not focused on the tax refund customer. Many lament that tax season is not what it once was. This phenomenon is due to both the refund loan hiatus and more aggressive competition.
Dealerships on the sidelines have seen the competition on the field steal their market share while garnering higher down payments. Those with tax refund strategies have seen a steady rise in business, leading to a decline for the rest.
Tax refund marketing has evolved over the past five years to counteract the absence of the refund loan. Now that the Tax Refund Advance has re-emerged, customer traffic is expected to soon follow.
Chip Wiley is the corporate trainer and marketing specialist for Tax Refund Services and Tax Max. Wiley can be reached at (813) 987-2199 or trs@taxrefundservices.com.
The National Alliance of Buy-Here, Pay-Here Dealers gathered feedback from nine attendees who came to its East Coast Conference last week in Orlando, Fla., that focused on best practices and compliance.
Perhaps one comment from an operator in Indiana summarized what NABD looks to accomplish with this latest event that “featured the greatest collection of legal talent in the 18-year history of NABD,” according to founder and president Ken Shilson.
“I always bring all my location managers with me to NABD conferences. After attending these sessions, they seem to better understand the importance and necessity of what we ask them to do on a daily basis,” said Jim Everett, who runs his BHPH business in Greenwood, Ind.
Attorneys Dave Bafumo, Trish Cacciola, Susan Chylik, Allen Denson, Mark Edelman, Tom Hudson, Eric Johnson, Terry O’Loughlin and Shaun Peterson explained and discussed the current legal and regulatory issues with attendees that impact the BHPH industry today.
“These legal experts really prepared attendees for all the important compliance challenges ahead,” Shilson said.
Attendees who attended the three-day event and completed the compliance sessions will receive a compliance certificate which evidences their participation.
Additionally, Hudson created a 12-step checklist to help attendees down the path to compliance after the conference.
The best operating practices sessions featured a panel presentation by John Neery of CARite, Terry Bowdler and George Klinke of LHPH as well as Hudson.
“These panelists did an outstanding job of explaining the pros and cons of this BHPH alternative business model,” Shilson said.
Other best practices sessions included:
— Web tips to regain market share
— Technology solutions
— A how-to on dealer advertising
— Accounting and tax update
— Tax refund tips
— An Autotrader presentation on its BHPH Finance Center
— Capital market alternative discussion groups
— Sourcing, financing and reconditioning inventory techniques
— A benchmarks/trends update
— Phone skill tips
— A current industry issues discussion
— A panel covering how regulatory issues may change BHPH
— An underwriting best practices panel.
“Attendee evaluations unanimously indicated that the conference sessions successfully met all their learning objectives,” Shilson said.
Emily Feathers of Powell, Wyo., supported Shilson's claim by saying, “I came to get a general education on current and relevant topics and thought the conference was very informative. All the speakers did a great job.”
Nick Hall from Lorain, Ohio, noted, “On compliance, the complaint issue was emphasized and it brought awareness to the importance of handling complaints efficiently and timely.”
Dave Rooker, also from Lorain, Ohio, added “I thought that there was really good coverage of many topics that I previously did not know much about.”
A sold out exhibit hall featured more than 60 exhibitors and sponsors who offered all the latest products and services to make attendees more efficient and profitable in the future. The exhibit hall included two receptions, coffees, and a breakfast that enabled attendees to network with industry experts, sponsors and others.
NABD announced that it will hold a Buy Here Pay Here Boot Camp on Jan. 9 and Jan. 10 at the iCars BHPH dealership owned by Ingram Walters in Charlotte, N.C., where attendees can “see and learn” through hands-on training. Shilson said space is limited, so operators are encouraged to call NABD headquarters at (832) 767-4759 while space remains available.
Special discounts to the Boot Camp are available for operators who attended the East Coast Conference.
NABD will also hold its 18th annual National Buy-Here, Pay-Here Conference at Wynn Hotel and Casino in Las Vegas on May 24-26.
For more information on these events, or to download conference presentations, visit www.bhphinfo.com.
Subprime Analytics, which provides computerized portfolio analysis and metrics used to evaluate subprime auto finance underwriting performance and practices, formed a strategic alliance with Vincentric on Monday in an effort to help buy-here, pay-here dealerships.
Vincentric provides data, knowledge and insight to the automotive industry by identifying and applying the different aspects of automotive ownership costs using its proprietary “dynamic cost to own” database.
“Our analytical services clients can now determine the best vehicle for each customer for the entire life of a buy-here, pay-here installment contract,” said Ken Shilson, president of Subprime Analytics and founder of the National Alliance of Buy-Here, Pay-Here Dealers (NABD).
“In the highly competitive environment of today, it is vital that vehicles sold to financially challenged consumers ‘stay sold,’” Shilson continued. “Good underwriting should include a careful evaluation of the customer’s ability to repay, and the vehicle operation, maintenance and repair costs should be considered.”
Shilson went on to mention other ways this partnership is geared to boost BHPH operators.
“BHPH customers generally have limited liquidity, financial capacity and flexibility, so the monthly and annual costs to operate, maintain and repair the vehicle they purchase impact their ability to repay their debt,” he said. “Subprime Analytics’ vehicle data together with components of the proprietary Vincentric cost of ownership data will give operators tools to make more informed underwriting decisions and stock the right vehicle inventory for their customer base.
“Prior to the formation of the alliance, Subprime Analytics and Vincentric performed extensive testing of several thousand transactions, confirming that they can identify the vehicles that work best for lower-income customers,” Shilson went on to say. “This information can be used to mitigate portfolio risk and reduce default rates. These combined analysis tools are now available for Subprime Analytics customers who engage us.”
At the upcoming NABD BHPH East Coast Conference in Orlando, Fla., on Nov. 3-5, a panel of experts will discuss subprime auto underwriting practices that work successfully today.
Dave Freed, who leads business development and market analysis at Vincentric, will be one of the panelists on hand who will explain how to apply its data to “keep more vehicles sold.”
“The Vincentric vehicle operating cost data is a game-changer," Freed said.
More information about the NABD East Coast Conference is available at www.bhphinfo.com or by calling (832) 767-4759.
Finance And Insurance Resources (FAIR) has partnered with KISS Concepts Group to release the Complete Asset Protection (CAP) program — what they believe is a first-of-its-kind, all-inclusive insurance program to protect the collateral of buy-here, pay-here dealers, lease-here, pay-here dealers, auto finance companies, banks, credit unions and related finance and lease companies.
The CAP program is one of several unique insurance offerings to be released this year, resulting from a strategic master agent private label agreement between FAIR and KISS Concepts Group. The two companies are building a platform of insurance programs tailored specifically for auto-related audiences.
“One of the biggest challenges every auto finance company faces is finding affordable, easy-to-implement ways to minimize their normal everyday losses, catastrophic losses and other unique risk exposures that occur in protecting their collateral and profit. The CAP program offers exactly that,” FAIR chief executive officer Rick Mims said.
“For even more peace of mind, the entire policy is backed by Certain Underwriters at Lloyd’s of London, one of the largest specialty insurance providers in the world with underwriting capacity in excess of $31 billion,” Mims conintue.
CAP includes the following coverage for both loans and leases, combined into one policy:
— Guaranteed asset protection (GAP): This coverage can protect both lenders and borrowers, so it can be presented during the sales process as a value-add to the vehicle buyer.
— Lender’s single interest: If the consumer stops making payments, the lender’s investment can be covered against many perils without the cost of having to track insurance.
—Skip: If the lender cannot locate the borrower, co-borrower or the vehicle, the lender’s investment can be covered.
—Physical damage and theft: If the vehicle is damaged or stolen before, during or after repossession (and the consumer’s insurance has lapsed), the lender’s investment can be covered.
—Title errors and omissions: If the insured party or the state makes an error or omission in the processing of the loan or title work that causes a loss, the insured party can be covered.
—Confiscation and seizure: If the vehicle is impounded or seized by police or a public/government/federal office or officer, the lender’s investment can be covered.
—Terrorism: If the vehicle is damaged during an act of terrorism, the lender’s investment can be covered.
—24-hour roadside assistance: This coverage can benefit both the borrower and lender and includes sign-and-drive coverage for items such as towing assistance, flat tire assistance, emergency fluid delivery, lockout assistance, battery service, rental car discounts and more.
Rod Heasley, president and chief relationships officer of KISS (Keep It Simple Successfully) Concepts Group partnered with FAIR to develop the CAP program. Heasley explained the policy offers dealers and lenders a “one-stop shop” to insure their collateral investment.
“Clients now have the convenience of combining multiple insurance coverages into a single policy. That means only one claim form and one point of contact,” he said.
“In addition to expanding coverage, CAP streamlines the dreaded ‘paperwork overload’ from dealing with multiple insurance agencies, thus adhering to our philosophy of keeping it simple,” Heasley went on to say.
CAP policies may be applied to new and/or existing loan portfolios. Coverages within the policy may be customized, mixed and matched depending on the insured party’s needs and preference.
For more information, contact KISS Concepts Group at (844) 857-0869.
